lapse

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Related to lapsing: call on, so far, brought out, took over

lapse

Health insurance Termination of coverage due to nonpayment within a specified time period
References in periodicals archive ?
Thus, it appears that lapsing of an otherwise nonlapse restriction in the event of a highly speculative IPO would not be a compensatory cancellation creating a taxable event.
Currently the purchase of each policy can take up to 120 days and can fall through at many different stages during the process (like lapsing before a sale as mentioned above).
To begin with, even a steady lapse rate of 2% would result in fully one-third of all policies lapsing with no value during the first 20 years, and almost 65% of policies lapsing with no value over 50 years (which, for many life insurance buyers, is a reasonable estimate of the number of years remaining in their lives).
According to the Senate Finance Committee Reports, the reason for this provision was that Congress was concerned about the use of lapsing rights to transfer value free of transfer tax.
The Life Paid-Up Rider can help protect individuals from the potentially significant tax consequences when a policy is at risk of lapsing.